Protestants and Pensions

Abstract

We document a statistically significant relationship between a region’s pension plan rankings or funding ratios and the fraction of the region’s population identifying as Protestant Christians (PC). We begin the analysis at the national level using a well-known pension quality index and then obtain similar results for the actuarial funded status of US state pension plans, which serves as an out-of-sample test. This work is related to the very old and (in)famous hypothesis by Max Weber on the “Protestant work ethic” but, more broadly, is consistent and within the sphere of recent scholarship and literature that indicates religion matters for financial economic outcomes.

Keywords: pensions, annuities, Protestants, religion, history

JEL Classification: B16, D15, G22, G52, N33, Z12, J32